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26 U.S.C. § 89 — Repealed. Pub. L. 101–140, title II, § 202(a), Nov. 8, 1989, 103 Stat. 830]

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26 U.S.C. § 89 — Repealed. Pub. L. 101–140, title II, § 202(a), Nov. 8, 1989, 103 Stat. 830]

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Source file: Laws/federal/codes/united-states-code/title-26/section-89-repealed-pub-l-101140-title-ii-202-a-nov-8-1989-103-stat-830--5edb1f4379.md
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Source location: Title 26, Chapter 1, § 89; chapter-001-normal-taxes-and-surtaxes.md

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### Statutory Notes Section, added Pub. L. 99–514, title XI, § 1151(a), Oct. 22, 1986, 100 Stat. 2494; amended Pub. L. 100–647, title I, § 1011B(a)(1)–(9), (21), (28), (29), (34), title III, § 3021(a)(1)(A), (B), (2)(A), (3)–(9), (11)–(13)(A), (b)(2)(B), (3), title VI, § 6051(a), Nov. 10, 1988, 102 Stat. 3483–3485, 3487, 3488, 3625–3632, 3695, related to nondiscrimination rules regarding benefits provided under employee benefit plans. #### Effective Date of Repeal Pub. L. 101–140, title II, § 202(c), Nov. 8, 1989, 103 Stat. 830, provided that: “The amendments made by this section [repealing this section] shall take effect as if included in section 1151 of the Tax Reform Act of 1986 [Pub. L. 99–514, see section 1151(k) set out as a note under [section 79 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section79&num=0&edition=prelim)].” #### Nonenforcement of Section for Fiscal Year 1990 Pub. L. 101–136, title V, § 528, Nov. 3, 1989, 103 Stat. 816, provided that: “No monies appropriated by this Act [see Tables for classification] may be used to implement or enforce section 1151 of the Tax Reform Act of 1986 or the amendments made by such section [section 1151 of Pub. L. 99–514, which enacted [section 89 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section89&num=0&edition=prelim), amended sections 79, 105, 106, 117, 120, 125, 127, 129, 132, 414, 505, 3121, 3306, 6039D, and 6652 of this title and [section 409 of Title 42](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section409&num=0&edition=prelim), The Public Health and Welfare, and enacted provisions set out as a note under [section 89 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section89&num=0&edition=prelim)].” #### Transitional Provisions Pub. L. 100–647, title III, § 3021(c), Nov. 10, 1988, 102 Stat. 3633, provided for the first issue of valuation rules, the interim impact on former employees, the meeting of the written requirement for covered plans in connection with implementation of section 89 of the Code, and the issuance by Nov. 15, 1988, of rules necessary to carry out section 89, prior to repeal by Pub. L. 101–140, title II, § 203(a)(7), Nov. 8, 1989, 103 Stat. 831. #### Part-Time Employee Defined for Purposes of Subsection (f) Pub. L. 100–647, title VI, § 6070, Nov. 10, 1988, 102 Stat. 3704, increased the number of employees who would be excluded from consideration under this section during plan years 1989 and 1990, in the case of a plan maintained by an employer which employs fewer than 10 employees on a normal working day during a plan year, prior to repeal by Pub. L. 101–140, title II, § 203(a)(7), Nov. 8, 1989, 103 Stat. 831.

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42 U.S.C. § 409 — “Wages” defined

**(a) In general** For the purposes of this subchapter, the term “wages” means remuneration paid prior to 1951 which was wages for the purposes of this subchapter under the law applicable to the payment of such remuneration, and remuneration paid after 1950 for employment, including the cash value of all remuneration (including benefits) paid in any medium other than cash; except that, in the case of remuneration paid after 1950, such term shall not include— (1) (A) That part of remuneration which, after remuneration (other than remuneration referred to in the succeeding subsections of this section) equal to $3,600 with respect to employment has been paid to an individual during any calendar year prior to 1955, is paid to such individual during such calendar year; (B) That part of remuneration which, after remuneration (other than remuneration referred to in the succeeding subsections of this section) equal to $4,200 with respect to employment has been paid to an individual during any calendar year after 1954 and prior to 1959, is paid to such individual during such calendar year; (C) That part of remuneration which, after remuneration (other than remuneration referred to in the succeeding subsections of this section) equal to $4,800 with respect to employment has been paid to an individual during any calendar year after 1958 and prior to 1966, is paid to such individual during such calendar year; (D) That part of remuneration which, after remuneration (other than remuneration referred to in the succeeding subsections of this section) equal to $6,600 with respect to employment has been paid to an individual during any calendar year after 1965 and prior to 1968, is paid to such individual during such calendar year; (E) That part of remuneration which, aft

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26 U.S.C. § 79 — Group-term life insurance purchased for employees

**(a) General rule** There shall be included in the gross income of an employee for the taxable year an amount equal to the cost of group-term life insurance on his life provided for part or all of such year under a policy (or policies) carried directly or indirectly by his employer (or employers); but only to the extent that such cost exceeds the sum of— (1) the cost of $50,000 of such insurance, and (2) the amount (if any) paid by the employee toward the purchase of such insurance. **(b) Exceptions** Subsection (a) shall not apply to— (1) the cost of group-term life insurance on the life of an individual which is provided under a policy carried directly or indirectly by an employer after such individual has terminated his employment with such employer and is disabled (within the meaning of section 72(m)(7)), (2) the cost of any portion of the group-term life insurance on the life of an employee provided during part or all of the taxable year of the employee under which— (A) the employer is directly or indirectly the beneficiary, or (B) a person described in section 170(c) is the sole beneficiary, for the entire period during such taxable year for which the employee receives such insurance, and (3) the cost of any group-term life insurance which is provided under a contract to which section 72(m)(3) applies. **(c) Determination of cost of insurance** For purposes of this section and section 6052, the cost of group-term insurance on the life of an employee provided during any period shall be determined on the basis of uniform premiums (computed on the basis of 5-year age brackets) prescribed by regulations by the Secretary. **(d) Nondiscrimination requirements** (1) **In general** — In the case of a discriminatory group-term life insurance plan— (A)

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26 U.S.C. § 105 — Amounts received under accident and health plans

**(a) Amounts attributable to employer contributions** Except as otherwise provided in this section, amounts received by an employee through accident or health insurance for personal injuries or sickness shall be included in gross income to the extent such amounts (1) are attributable to contributions by the employer which were not includible in the gross income of the employee, or (2) are paid by the employer. **(b) Amounts expended for medical care** Except in the case of amounts attributable to (and not in excess of) deductions allowed under section 213 (relating to medical, etc., expenses) for any prior taxable year, gross income does not include amounts referred to in subsection (a) if such amounts are paid, directly or indirectly, to the taxpayer to reimburse the taxpayer for expenses incurred by him for the medical care (as defined in section 213(d)) of the taxpayer, his spouse, his dependents (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof), and any child (as defined in section 152(f)(1)) of the taxpayer who as of the end of the taxable year has not attained age 27. Any child to whom section 152(e) applies shall be treated as a dependent of both parents for purposes of this subsection. **(c) Payments unrelated to absence from work** Gross income does not include amounts referred to in subsection (a) to the extent such amounts— (1) constitute payment for the permanent loss or loss of use of a member or function of the body, or the permanent disfigurement, of the taxpayer, his spouse, or a dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof), and (2) are computed with reference to the nature of the injury without regard to the period the

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26 U.S.C. § 106 — Contributions by employer to accident and health plans

**(a) General rule** Except as otherwise provided in this section, gross income of an employee does not include employer-provided coverage under an accident or health plan. **(b) Contributions to Archer MSAs** (1) **In general** — In the case of an employee who is an eligible individual, amounts contributed by such employee’s employer to any Archer MSA of such employee shall be treated as employer-provided coverage for medical expenses under an accident or health plan to the extent such amounts do not exceed the limitation under section 220(b)(1) (determined without regard to this subsection) which is applicable to such employee for such taxable year. (2) **No constructive receipt** — No amount shall be included in the gross income of any employee solely because the employee may choose between the contributions referred to in paragraph (1) and employer contributions to another health plan of the employer. (3) **Special rule for deduction of employer contributions** — Any employer contribution to an Archer MSA, if otherwise allowable as a deduction under this chapter, shall be allowed only for the taxable year in which paid. (4) **Employer MSA contributions required to be shown on return** — Every individual required to file a return under section 6012 for the taxable year shall include on such return the aggregate amount contributed by employers to the Archer MSAs of such individual or such individual’s spouse for such taxable year. (5) **MSA contributions not part of COBRA coverage** — Paragraph (1) shall not apply for purposes of section 4980B. (6) **Definitions** — For purposes of this subsection, the terms “eligible individual” and “Archer MSA” have the respective meanings given to such terms by section 220. (7) **Cross reference** — For penalty on failure b

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26 U.S.C. § 117 — Qualified scholarships

**(a) General rule** Gross income does not include any amount received as a qualified scholarship by an individual who is a candidate for a degree at an educational organization described in section 170(b)(1)(A)(ii). **(b) Qualified scholarship** For purposes of this section— (1) **In general** — The term “qualified scholarship” means any amount received by an individual as a scholarship or fellowship grant to the extent the individual establishes that, in accordance with the conditions of the grant, such amount was used for qualified tuition and related expenses. (2) **Qualified tuition and related expenses** — For purposes of paragraph (1), the term “qualified tuition and related expenses” means— (A) tuition and fees required for the enrollment or attendance of a student at an educational organization described in section 170(b)(1)(A)(ii), and (B) fees, books, supplies, and equipment required for courses of instruction at such an educational organization. **(c) Limitation** (1) **In general** — Except as provided in paragraph (2), subsections (a) and (d) shall not apply to that portion of any amount received which represents payment for teaching, research, or other services by the student required as a condition for receiving the qualified scholarship or qualified tuition reduction. (2) **Exceptions** — Paragraph (1) shall not apply to any amount received by an individual under— (A) the National Health Service Corps Scholarship Program under section 338A(g)(1)(A) of the Public Health Service Act, (B) the Armed Forces Health Professions Scholarship and Financial Assistance program under subchapter I of chapter 105 of title 10, United States Code, or (C) a comprehensive student work-learning-service program (as defined in section 448(e) of the Highe

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26 U.S.C. § 125 — Cafeteria plans

**(a) General rule** Except as provided in subsection (b), no amount shall be included in the gross income of a participant in a cafeteria plan solely because, under the plan, the participant may choose among the benefits of the plan. **(b) Exception for highly compensated participants and key employees** (1) **Highly compensated participants** — In the case of a highly compensated participant, subsection (a) shall not apply to any benefit attributable to a plan year for which the plan discriminates in favor of— (A) highly compensated individuals as to eligibility to participate, or (B) highly compensated participants as to contributions and benefits. (2) **Key employees** — In the case of a key employee (within the meaning of section 416(i)(1)), subsection (a) shall not apply to any benefit attributable to a plan for which the qualified benefits provided to key employees exceed 25 percent of the aggregate of such benefits provided for all employees under the plan. For purposes of the preceding sentence, qualified benefits shall be determined without regard to the second sentence of subsection (f). (3) **Year of inclusion** — For purposes of determining the taxable year of inclusion, any benefit described in paragraph (1) or (2) shall be treated as received or accrued in the taxable year of the participant or key employee in which the plan year ends. **(c) Discrimination as to benefits or contributions** For purposes of subparagraph (B) of subsection (b)(1), a cafeteria plan does not discriminate where qualified benefits and total benefits (or employer contributions allocable to qualified benefits and employer contributions for total benefits) do not discriminate in favor of highly compensated participants. **(d) Cafeteria plan defined** For purposes of this

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26 U.S.C. § 127 — Educational assistance programs

**(a) Exclusion from gross income** (1) **In general** — Gross income of an employee does not include amounts paid or expenses incurred by the employer for educational assistance to the employee if the assistance is furnished pursuant to a program which is described in subsection (b). (2) **$5,250 maximum exclusion** — If, but for this paragraph, this section would exclude from gross income more than $5,250 of educational assistance furnished to an individual during a calendar year, this section shall apply only to the first $5,250 of such assistance so furnished. **(b) Educational assistance program** (1) **In general** — For purposes of this section an educational assistance program is a separate written plan of an employer for the exclusive benefit of his employees to provide such employees with educational assistance. The program must meet the requirements of paragraphs (2) through (6) of this subsection. (2) **Eligibility** — The program shall benefit employees who qualify under a classification set up by the employer and found by the Secretary not to be discriminatory in favor of employees who are highly compensated employees (within the meaning of section 414(q)) or their dependents. For purposes of this paragraph, there shall be excluded from consideration employees not included in the program who are included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that educational assistance benefits were the subject of good faith bargaining between such employee representatives and such employer or employers. (3) **Principal shareholders or owners** — Not more than 5 percent of the amounts paid or incurred by

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26 U.S.C. § 129 — Dependent care assistance programs

**(a) Exclusion** (1) **In general** — Gross income of an employee does not include amounts paid or incurred by the employer for dependent care assistance provided to such employee if the assistance is furnished pursuant to a program which is described in subsection (d). (2) **Limitation of exclusion** (A) *In general* — The amount which may be excluded under paragraph (1) for dependent care assistance with respect to dependent care services provided during a taxable year shall not exceed $7,500 ($3,750 in the case of a separate return by a married individual). (B) *Year of inclusion* — The amount of any excess under subparagraph (A) shall be included in gross income in the taxable year in which the dependent care services were provided (even if payment of dependent care assistance for such services occurs in a subsequent taxable year). (C) *Marital status* — For purposes of this paragraph, marital status shall be determined under the rules of paragraphs (3) and (4) of section 21(e). (D) *Special rule for 2021* — In the case of any taxable year beginning after December 31, 2020, and before January 1, 2022, subparagraph (A) shall be applied by substituting “$10,500 (half such dollar amount” for “$5,000 ($2,500”. **(b) Earned income limitation** (1) **In general** — The amount excluded from the income of an employee under subsection (a) for any taxable year shall not exceed— (A) in the case of an employee who is not married at the close of such taxable year, the earned income of such employee for such taxable year, or (B) in the case of an employee who is married at the close of such taxable year, the lesser of— (i) the earned income of such employee for such taxable year, or (ii) the earned income of the spouse of such employee for such ta

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26 U.S.C. § 132 — Certain fringe benefits

**(a) Exclusion from gross income** Gross income shall not include any fringe benefit which qualifies as a— (1) no-additional-cost service, (2) qualified employee discount, (3) working condition fringe, (4) de minimis fringe, (5) qualified transportation fringe, (6) qualified moving expense reimbursement, (7) qualified retirement planning services, or (8) qualified military base realignment and closure fringe. **(b) No-additional-cost service defined** For purposes of this section, the term “no-additional-cost service” means any service provided by an employer to an employee for use by such employee if— (1) such service is offered for sale to customers in the ordinary course of the line of business of the employer in which the employee is performing services, and (2) the employer incurs no substantial additional cost (including forgone revenue) in providing such service to the employee (determined without regard to any amount paid by the employee for such service). **(c) Qualified employee discount defined** For purposes of this section— (1) **Qualified employee discount** — The term “qualified employee discount” means any employee discount with respect to qualified property or services to the extent such discount does not exceed— (A) in the case of property, the gross profit percentage of the price at which the property is being offered by the employer to customers, or (B) in the case of services, 20 percent of the price at which the services are being offered by the employer to customers. (2) **Gross profit percentage** (A) *In general* — The term “gross profit percentage” means the percent which— (i) the excess of the aggregate sales price of property sold by the employer to customers over the aggregate cost of such property to the employe

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26 U.S.C. § 3121 — Definitions

**(a) Wages** For purposes of this chapter, the term “wages” means all remuneration for employment, including the cash value of all remuneration (including benefits) paid in any medium other than cash; except that such term shall not include— (1) in the case of the taxes imposed by sections 3101(a) and 3111(a) that part of the remuneration which, after remuneration (other than remuneration referred to in the succeeding paragraphs of this subsection) equal to the contribution and benefit base (as determined under section 230 of the Social Security Act) with respect to employment has been paid to an individual by an employer during the calendar year with respect to which such contribution and benefit base is effective, is paid to such individual by such employer during such calendar year. If an employer (hereinafter referred to as successor employer) during any calendar year acquires substantially all the property used in a trade or business of another employer (hereinafter referred to as a predecessor), or used in a separate unit of a trade or business of a predecessor, and immediately after the acquisition employs in his trade or business an individual who immediately prior to the acquisition was employed in the trade or business of such predecessor, then, for the purpose of determining whether the successor employer has paid remuneration (other than remuneration referred to in the succeeding paragraphs of this subsection) with respect to employment equal to the contribution and benefit base (as determined under section 230 of the Social Security Act) to such individual during such calendar year, any remuneration (other than remuneration referred to in the succeeding paragraphs of this subsection) with respect to employment paid (or considered under this paragraph as h

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